Are Game Developers Winning the Battle Against Mobile App Stores?

July 8, 2024
The escalating conflict between major game companies and mobile phone manufacturers has reached a new milestone as both sides grapple for control over game distribution channels. Tencent’s recent announcement that the mobile game “Dungeon & Fighter: Origin” will be removed from certain Android app stores, including those operated by industry giants like Huawei, OPPO, Vivo, and Xiaomi, beginning on June 20th, marks a significant turning point in this ongoing battle. Released on May 21, the game has been a massive success, dominating the iOS bestseller list for 29 consecutive days and projecting first-month revenues exceeding 3 billion yuan. This move is more than just a tactical withdrawal from specific platforms; it symbolizes a broader resistance from game developers against the traditional commission rules imposed by mobile app stores.Historically, the ‘Hardcore Alliance,’ which enforced a 5:5 revenue-sharing model, held considerable power, primarily because their app stores came pre-installed on millions of devices. However, the sector is now witnessing a dramatic shift from ‘channel dominance’ to ‘product dominance,’ thereby empowering game developers. These developers are increasingly leveraging direct distribution methods to bypass conventional platforms and reclaim control over their revenue streams. This not only allows them to maximize profits but also to foster a more direct relationship with their user base. Such a strategic move by Tencent and other game developers, including NetEase and miHoYo, is contributing to the erosion of the ‘Hardcore Alliance’s’ previously unchallenged influence over mobile game distribution.

Shifts in Power Dynamics: From Channel to Product Dominance

The ongoing power struggle between game developers and mobile app stores has reached critical mass, highlighting a fundamental shift in how the gaming ecosystem operates. Traditional power dynamics that favored mobile app stores are being upended by game companies that are now focusing on product dominance. Major players in the industry, such as Tencent, NetEase, and miHoYo, are launching new products independently of mobile manufacturers’ app stores. Despite avoiding these traditional platforms, these companies continue to achieve impressive sales figures and gather positive user feedback. This trend suggests that the ‘Hardcore Alliance,’ which once dictated the terms of revenue-sharing agreements, is losing its hegemony over the mobile game distribution market.These shifts in power dynamics are not isolated incidents but part of a broader market disruption phenomenon. With the rise of powerhouse platforms like Douyin and WeChat, which are reshaping the digital landscape, content developers are gaining more avenues to distribute their products and engage their audience. By offering attractive alternatives to the traditional app stores, these platforms empower game developers to bypass conventional distribution channels. Tencent’s removal of “Dungeon & Fighter: Origin” from certain Android app stores is more than just a tactical decision; it’s indicative of a wider movement in the industry. Game developers are asserting their control, challenging the status quo, and steering the market away from entrenched channel-based revenue models.

The Future of Mobile Game Distribution

The escalating clash between leading game developers and mobile phone manufacturers has reached a critical point as each vies for control over game distribution channels. Tencent’s recent decision to remove “Dungeon & Fighter: Origin” from specific Android app stores—including those of Huawei, OPPO, Vivo, and Xiaomi—starting June 20th, signifies a major shift in this ongoing battle. Released on May 21, the game has achieved remarkable success, topping the iOS bestseller list for 29 straight days and projecting first-month revenues surpassing 3 billion yuan. This move by Tencent isn’t just a retreat from certain platforms but mirrors a broader pushback by game developers against traditional commission structures enforced by mobile app stores.Historically, the “Hardcore Alliance,” with its 50/50 revenue-sharing model, held significant sway, as their app stores came pre-installed on millions of devices. However, the landscape is shifting from “channel dominance” to “product dominance,” empowering game developers to bypass conventional platforms through direct distribution. This strategy not only maximizes profits but also fosters direct relationships with users. Other developers, like NetEase and miHoYo, are following suit, challenging the “Hardcore Alliance’s” previously uncontested hold on mobile game distribution.

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